17. Participation in RFOs and RFPs and Electronic Solicitations

PG&E is currently authorized to participate in Requests for Proposals (RFPs) issued by generators. In this proceeding, PG&E proposes to expand this authority to include RFPs and Requests for Offers (RFOs) issued by other market participants, such as other load serving entities (LSEs). (PG&E Reply Brief at 21-22.)

Pacific Environment opposes this request, while SCE supports PG&E. (See, SCE Reply Brief at 37-39.) PG&E and SCE argue that the authority they request would allow them to engage in transactions, such as the sale of excess resource adequacy (RA) capacity, which would provide ratepayer benefits.

Based on the record before us, it appears reasonable to allow the utilities to participate in RFPs and RFOs issued by other market participants, including other LSEs. Existing Independent Evaluator (IE) rules and procurement oversight rules would apply, including use of an IE for solicitations over two years, or for solicitations that involve a utility affiliate. An application must be filed and Commission approval obtained for the sale of products that are five years or more in duration.

PG&E also proposes to participate in electronic solicitations, expanding upon the previously authorized "electronic auctions." (PG&E Opening Brief at 15-16.) Pacific Environment opposes this request, arguing in particular against the potential use of sealed bids as decreasing transparency. (Pacific Environment Opening Brief at 25-26.) PG&E's proposal would allow PG&E (and presumably the other utilities) to participate in sealed-bid solicitations, and also to participate in a wider range of electronic platforms, including e-mails and instant messaging. (PG&E Opening Brief at 15.)

While this is a potentially significant expansion, and the language describing the types of transactions that could be participated in is both broad and vague, we acknowledge that solicitations may be conducted in a range of electronic formats in the future, and it seems reasonable to allow the utilities to participate. PG&E states that:

The electronic solicitations that PG&E would conduct or participate in do not involve bids related to the development of utility-owned generation. Rather, these solicitations are for short- and medium-term products, not new utility-owned resources. (PG&E Reply Brief at 20-21.)

In addition, PG&E states that all solicitations authorized would in fact be competitive processes, as opposed to bilateral negotiations. (PG&E Opening Brief at 15.)

With these conditions - - no utility-owned resources, and only competitive processes - - the utilities are authorized to engage in appropriate electronic solicitations. Again, existing IE rules would apply, including use of an IE for solicitations over two years, or for solicitations that involve a utility affiliate, and pre-approval is limited to transactions involving contracts that are less than five years in duration.